As filed with the Securities and Exchange Commission on October 1, 2002January 20, 2004
Registration Statement No. ----------333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SWIFT ENERGY COMPANY
(Exact name of Registrant as specified in its charter)Registrant)
Texas 1311 74-2073055
(State of incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
Terry E. Swift, Chief Executive Officer
Swift Energy Company
16825 Northchase Drive,Dr., Suite 400
Houston, Texas 77060
(281) 874-2700
(Name, address and telephone number of
Registrant's principal executive offices and agent for service)
Copies to:
Judy G. GechmanDonald W. Brodsky Karen Bryant
Lee Thompson General Counsel-Corporate Governance
Jenkens & Gilchrist, Swift Energy Company
A Professional Corporation 1100 Louisiana Street,16825 Northchase Dr., Suite 1800400
1401 McKinney, Suite 2700 Houston, Texas 7700277060
Houston, Texas 77010 (281) 874-2700
(713) 951-3300
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.Registration Statement.
|_| If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
|_||X| If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
|X||_| If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.g.offering.
|_| If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
|_| If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
|_|
CALCULATION OF REGISTRATION FEE
======================================== ================== ==================== ==================== ==============
Proposed
Maximum ProposedTitle of Each Maximum Amount of
Title of Each Class of Amount being Offering PriceSecurities Aggregate Offering Registration
Securities
to be Registered Registered Per Share (1) Price (1)Registered(1) Offering Price(1)(2)(3) Fee
- ---------------------------------------- ------------------ -------------------- -------------------- -------------------------------------------------------- ------------------------------ --------------------------
Debt Securities....................(4)
- ------------------------------------------ ------------------------------ --------------------------
Common Stock.......................(5)
- ------------------------------------------ ------------------------------ --------------------------
Preferred Stock....................(5)
- ------------------------------------------ ------------------------------ --------------------------
Depositary Shares..................(6)
- ------------------------------------------ ------------------------------ --------------------------
Warrants..............................
- ------------------------------------------ ------------------------------ --------------------------
Guarantees of Debt Securities...(2)(7)
- ------------------------------------------ ------------------------------ --------------------------
TOTAL........................ $350,000,000 -0-(8)
- ------------------------------------------ ------------------------------ --------------------------
(1) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion, redemption
or exercise of, as the case may be, debt securities, preferred stock,
depositary shares or warrants registered hereunder, including under any
applicable antidilution provisions. Any securities registered hereunder may
be sold separately or as units with other securities registered hereunder.
This total amount also includes such securities as may, from time to time,
be issued upon conversion or exchange of securities registered hereunder,
to the extent any such securities are, by their terms, convertible into or
exchangeable for other securities.
(2) An indeterminate principal amount or number of debt securities, guarantees
of debt securities, preferred stock, depositary shares and common stock may
be issued from time to time at indeterminate prices by the Registrant in
connection with the issuance by the Registrant of the securities registered
hereunder, with an aggregate offering price not to exceed $350,000,000.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act, as amended.
(4) If any debt securities are issued at an original issue discount, then the
offering price of the debt securities shall be in such amount as shall
result in an aggregate initial offering price not to exceed $350,000,000,
or the equivalent thereof in foreign currencies, foreign currency units or
composite currencies, less the offering price of any securities previously
issued hereunder.
(5) Each share of common stock is accompanied by a preferred share purchase
right pursuant to the Rights Agreement (as Amended and Restated as of March
31, 1999) between Swift Energy Company and American Stock $0.01 par value (3) 300,000Transfer & Trust
Company, as Rights Agent.
(6) Such indeterminate number of depositary shares $10.60 $3,180,000.00 $293.00
======================================== ================== ==================== ==================== ==============will be represented by
depositary receipts. In the event that the Registrant elects to offer to
the public fractional interests in shares of preferred stock registered
hereunder, depositary receipts will be distributed to those persons
purchasing the fractional interests and the shares of preferred stock will
be issued to the Depository under the deposit agreement.
(7) No separate consideration will be received for any guarantee of the debt
securities being registered; accordingly, pursuant to Rule 457(n) of the
Securities Act of 1933, as amended, no separate filing fee is required.
(8) Swift paid a registration fee of $56,642 in connection with its
Registration Statement on Form S-3 (Reg. No. 333-64692) covering
$350,000,000 that was filed with the Securities and Exchange Commission on
July 6, 2001, of which $118,518,750 of unsold securities remains. As
calculated pursuant to Rule 457(o) at the statutory rate of $80.90 per
$1,000,000 of securities registered, and pursuant to Rule 457(p), $28,315
of the unused $29,630 registration fee paid for the earlier registration
statement is being used to offset the $28,315 registration fee due for this
registration statement.
(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, and based upon the average of the high and low prices reported on
the New York Stock Exchange, Inc. on September 30, 2002.
(2) This registration statement shall also cover any additional shares of
common stock which become issuable by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
outstanding shares of common stock.
(3) Attached to each share of common stock is a preferred share purchase right
pursuant to the Rights Agreement (as Amended and Restated as of March 31,
1999) between Swift Energy Company and American Stock Transfer & Trust
Company, as Rights Agent. Until the occurrence of certain prescribed
events, none of which has occurred, the rights are not detachable from the
common stock nor exercisable and will be transferred along with, and only
with, the common stock. Accordingly, no separate registration fee is
payable with respect thereto.
The Registrant hereby amends this registration statementRegistration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statementRegistration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statementRegistration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. Antrim
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities, in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 1, 2002JANUARY 20, 2004
PROSPECTUS
$350,000,000
Swift Energy Company
300,000Debt Securities
Common Stock
Preferred Stock
Depositary Shares
To be offered by Marabella Enterprises Limited, a shareholder ofWarrants
Swift Energy Company This prospectus relates to themay offer and sale by Marabella Enterprises
Limited, a wholly-owned subsidiary of Bligh Oil & Minerals N.L., and by any
pledgees of its shares of up to 300,000 presently issued and outstanding shares
of common stock, par value $0.01 per share. We will receive none of the proceeds
from the sale of the shares by Marabella. For a description of our common stock
and related rights, see "Description of Capital Stock."
Under an asset purchase agreement with Marabella and its affiliates, we are
obligated to register these 300,000 shares, and to maintain the effectiveness of
this registration statement until September 30, 2003. The sale of the shares by
Marabella is not currently subject to any underwriting agreement. See "Plan of
Distribution."
The shares may be sold by Marabella and by any pledgees of its sharessell from time to time on the New York Stock Exchange or such other nationaldebt securities,
exchange or automated interdealer quotation system on which our
common stock, is
then listed, through negotiated transactionspreferred stock, depositary shares or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. Under our asset purchase
agreement with Marabellawarrants. You should
carefully read this prospectus and its affiliates, Marabella together with any of its
pledgees may not sell more than a total of 60,000 of these shares in any one
week until September 30, 2003. See "Plan of Distribution."prospectus supplement before you invest.
Our common stock is traded on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "SFY."
The last reported sale price of our common
stock on September 30, 2002 on the New York Stock Exchange was $10.40 per share.
Marabella, any of its pledgees of the 300,000 shares and any broker
executing selling orders on their behalf may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933. Commissions received by any
broker may be deemed to be underwriting commissions under the Securities Act.
-------------------------------
InvestingThere are significant risks associated with an investment in our
common stock involves risks.securities. See "Risk Factors" beginning on page 2.
-------------------------------This prospectus provides you with a general description of the securities
that may be offered. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement that describes those securities. We will
provide specific terms of the offering and sale of these securities in
supplements to this prospectus. These terms will include the initial offering
price, aggregate amount of the offering, listing on any securities exchange or
quotation system, risk factors and the agents, dealers or underwriters, if any,
to be used in connection with the sale of these securities. The Supplements may
also add, update or change information contained in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _______________, 20022004
You should rely only on the information contained in or incorporated by
reference in this prospectus and in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information contained in or incorporated by reference
in this prospectus is accurate as of any date other than the date on the front
of this prospectus.prospectus or the applicable prospectus supplement.
TABLE OF CONTENTS
Page
About This Prospectus.............................................1
Where You Can Find More Information...............................1
Risk Factors......................................................2
Forward-Looking Statements........................................6
The Company.......................................................6
Use Of Proceeds...................................................8
Description Of Capital Stock......................................8
Selling Shareholders.............................................12
Plan Of Distribution.............................................12
Legal Matters....................................................14
Experts..........................................................14ABOUT THIS PROSPECTUS.............................................................................................1
WHERE YOU CAN FIND MORE INFORMATION...............................................................................1
RISK FACTORS......................................................................................................2
FORWARD-LOOKING STATEMENTS........................................................................................3
THE COMPANY.......................................................................................................4
RATIO OF EARNINGS TO FIXED CHARGES................................................................................5
USE OF PROCEEDS...................................................................................................6
DESCRIPTION OF DEBT SECURITIES....................................................................................6
DESCRIPTION OF CAPITAL STOCK.....................................................................................15
DESCRIPTION OF DEPOSITARY SHARES.................................................................................20
DESCRIPTION OF WARRANTS..........................................................................................21
PLAN OF DISTRIBUTION.............................................................................................21
LEGAL OPINIONS...................................................................................................23
EXPERTS..........................................................................................................23
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission or "SEC," using a "shelf" registration process. Under
the shelf process, Marabella and other selling shareholders using
this registration statementwe may sell up to a total of 300,000 sharesany combination of the common stocksecurities described in
this prospectus in one or more offerings until
September 30, 2003.up to a total dollar amount of
$350,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should carefully read this
prospectus, any applicable prospectus supplement, together with additional
information described under the heading "Where You Can Find More Information.""WHERE YOU CAN FIND MORE INFORMATION"
before you invest in any of these securities.
As used in this prospectus, "Swift," "we," "us," and "our" refer to Swift
Energy Company and where applicable, its subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, or "Exchange Act," which requires us to file annual, quarterly and special reports,
proxy statements and other information with the SEC.Securities and Exchange
Commission, or the "SEC." You may read and copy any document that we file at the
public reference
roomsPublic Reference Room of the SEC inat 450 Fifth Street, N.W., Washington, D.C., New York and Chicago, Illinois.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of its public reference rooms.room. In addition, our reports and other
information concerning us can be inspected at the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005, where our common stock is listed. You
may also accessinspect our filings over the Internet at the SEC's web site at
http://www.sec.gov, or at our own website at http://www.swiftenergy.com.
However, the other information on Swift's website does not constitute a part of
this prospectus.
This prospectus constitutes part of a registration statementRegistration Statement on Form S-3
filed with the SEC under the Securities Act of 1933, as amended, or "Securities
Act."1933. It omits some of the
information contained in the registration statement,Registration Statement, and reference is made to
the registration statementRegistration Statement for further information with respect to us and the
securities being offered hereunder.we are offering. Any statement contained in this prospectus
concerning the provisions of any document filed as an exhibit to the
registration statementRegistration Statement or otherwise filed with the SEC is not necessarily
complete, and in each instance reference is made to the copy of the filed
document.
Incorporation by Reference
The SEC allows us to "incorporate by reference" certainthe information we file
with them, into this prospectus, which means that we can disclose important information to you by
referring you to other documents filed with the SEC.those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information and the
information in the prospectus. We incorporate by reference (excluding any
information furnished pursuant to Item 9 or Item 12 of any report on Form 8-K)
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
the earlier of the sale by the selling shareholders ofwe sell all the securities covered by this prospectus or September 30, 2003:prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31, 2001;2002;
2. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2002 and2003, June 30, 2002;2003 and September 30, 2003;
3. The description of our common stock contained in our registration
statement on Form 8-A filed on July 24, 1981, as amended, through June 24, 1991,
including
any amendment or report filed before or after the date of this
prospectus for the purpose of updating the description;
4. Our Current Reports on Form 8-K filed on April 10, 2002, April 15, 2002,
April 16, 2002 and June 18, 2002; and
5. The description of our preferred share purchase rights contained in
our registration statement on Form 8-A filed on August 11, 1997, as
amended on April 7, 1999, including any amendment or report filed
before or after the date of this prospectus for the purpose of
updating the description.description; and
5. Our Current Reports on Form 8-K dated May 7, 2003, August 6, 2003, and
November 5, 2003.
1
Any statement contained in a document incorporated or considered to be
incorporated by reference in this prospectus shall be considered to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document that is or is
considered to be incorporated by reference modifies or supersedes that
statement. Any statement that is modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.
You may request a copy of these filings (other than an exhibit to a filing,
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing or
telephoning Alton D. Heckaman, Jr., SeniorBruce H. Vincent, Executive Vice President - Finance and Chief Financial Officer,President--Corporate Development,
Swift Energy Company, Suite 400, 16825 Northchase Drive, Houston, Texas 77060,
phone: (281) 874-2700.
RISK FACTORS
An investmentThere are a number of risks associated with investing in Swift and in our
stock involves significant risks.industry. You should carefully considerreview the followingmore detailed description of risk
factors before you decidecontained in the supplement to purchase Swift stock.
You should also carefully readthis prospectus.
Steep or prolonged drops in prices can harm us financially and consider all ofhurt our ability
to grow.
Our revenue, profitability and cash flow depend upon the information we have
includedprices and demand
for oil and gas. The markets for these commodities are very volatile and steep
or incorporated by referenceprolonged drops in this prospectus before you decideprices can harm us financially and hurt our ability to
purchase Swift stock.
Oil and natural gas prices are volatile. A substantial decreasegrow. The changes in oil and natural gas prices wouldhave a significant impact on the
value of our reserves and on our cash flow.
Oil and natural gas drilling and producing operations involve various risks.
Our drilling activities are subject to many risks, including the risk that
we will not discover commercially productive reservoirs. Operating and
developing oil and natural gas properties involves a number of inherent risks,
including the risk of personal injury, environmental contamination or loss of
wells. In addition, our drilling operations may be curtailed, delayed or
canceled as a result of other factors, including title problems, adverse weather
conditions, facility or equipment malfunctions and compliance with environmental
and other governmental requirements. We may not be able to insure against all of
these risks.
2
Estimating our reserves, production and future net cash flow is difficult to do
with any certainty.
Estimates of our proved developed oil and natural gas reserves and the
resulting future net revenues contained in this prospectus and elsewhere are
based on a number of uncertainties. A failure to realize our estimated prices or
estimated production volumes could materially adversely affect our revenues,
profitability and financial results.
Our future financial condition,health.
Shortages of oil field equipment, services and qualified personnel could reduce
our cash flow and adversely affect results of operations.
Our ability to conduct operations in a timely and cost effective manner
depends on the availability of supplies, equipment and personnel. The oil and
gas industry is cyclical and experiences periodic shortages of drilling rigs and
other equipment, tubular goods, supplies and experienced personnel. Shortages
can delay operations and the valuematerially increase operating and capital costs.
Our level of indebtedness may adversely affect operations and limit our growth.
We make, and will continue to make, substantial capital expenditures to
acquire, develop, produce, explore and abandon our oil and natural gas properties depend primarilyreserves.
Our bank borrowing base is adjusted at the banks' discretion and is based in
part upon marketexternal factors over which we have no control. Further, our cash flow
from operations is highly dependent on the prices that we receive for oil and
natural gas. Oil and naturalAny decrease in our revenues, as a result of lower oil or gas
prices historically have been volatileor otherwise, could limit our ability to replace reserves or maintain
production at current levels. If our cash flow from operations drops
significantly, we may be unable to grow our production and will
likely continueproved reserves which
in turn could materially adversely affect our revenues, profitability, and
financial health.
Our future success depends on our ability to be volatile in the future. The prices forfind, develop or acquire additional
oil and natural gas reserves that are subjecteconomically recoverable.
Our future success depends on our ability to wide fluctuation in response to relatively minor changes in the
supply of and demand forfind, develop or acquire
additional oil and natural gas market uncertainty, worldwide
economic conditions, weather conditions, import prices, political conditions in
major oil producing regions, especially the Middle East, and actions taken by
OPEC. A significant decrease in price levels for an extended period would
negatively affect us in several ways:
o our cash flow would be reduced, decreasing funds available for capital
expenditures employedreserves that are economically recoverable.
Failure to replace reserves or increase production;
o certain reserves would no longer be economic to produce, leading to
both lower proved reserves and cash flow;
o our lenders could reduce the borrowing base under our credit facility
because of lower oil and gas reserve values, reducing our liquidity
and possibly requiring mandatory loan repayments; and
o access to other sources of capital, such as equity or long-term debt
markets, could be severely limited or unavailable in a low price
environment.
Consequently, our revenues and profitability would suffer.
Our debt reduces our financial flexibility, and our debt levels may increase.
At August 31, 2002, our long term debt comprised approximately 48% of our
total capitalization. Increased debt:
2
o would require us to dedicate a significant portion of our cash flow to
the payment of interest;
o would subject us to a higher financial risk in an economic downturn
due to substantial debt service costs;
o would limit our ability to obtain financing or raise equity capital in
the future; and
o may place us at a competitive disadvantage to the extent that we are
more highly leveraged than some of our peers.
Subject to restrictions in our credit facility and the indentures for our
senior subordinated notes due 2009 and 2012, as of August 31, 2002, we had a
$300.0 million credit facility with a borrowing base of $195.0 million of which
$190.3 million was available for borrowing. If we increase our debt levels
further, the risks discussed above would become greater.
If we cannot replace our reserves, our revenues and financial conditiondo so will suffer.
Unless we successfully replace our reserves, our production will decline,
resultingresult in lower revenuesproduction and cash flow.
When oil and gas prices decrease,Investors in our cash flow decreases, resultingsecurities may encounter difficulties in less available cash to drill and replace our
reserves and an increased need to draw on our bank line of credit.
Drilling wells is speculative and capital intensive.
Developing and exploring for oil and gas properties requires significant
capital expenditures and involves a high degree of financial risk. The budgeted
costs of drilling, completing and operating wells are often exceeded and can
increase significantly when drilling costs rise. Drillingobtaining, or may be
unsuccessful
for many reasons, including geological or title problems, weather, cost
overruns, equipment shortages and mechanical difficulties. Moreover, the
successful drilling of an oil or gas well does not ensure a profit on
investment. Exploratory wells bear a much greater risk of loss than development
wells. A variety of factors, both geological and market-related, can cause a
wellunable to become uneconomical or only marginally economic. In additionobtain, recoveries from Arthur Andersen LLP with respect to their
cost, unsuccessful wells can hurt our efforts to replace reserves.
Estimates of proved reserves are uncertain, and revenues from production may
vary from expectations significantly.
The quantities and valuesits audits
of our proved reserves includedfinancial statements at December 31, 2001 and for each of the two years
in the period ended December 31, 2001.
Because we are unable to obtain the written consent of Arthur Andersen LLP
to our naming it in this prospectus and the documents we have incorporated by reference are only
estimates and subject to numerous uncertainties. Estimates by other engineers
might differ materially. The accuracy of any reserve estimate is a function of
the quality of available data and of engineering and geological interpretation.
These estimates depend on assumptions regarding quantities and production rates
of recoverable oil and gas reserves, future prices for oil and gas, and timing
and amounts of development expenditures and operating expenses, all of which
will vary from those assumed inas having certified our estimates. These variances may be
significant. For example, in 2001 the net reduction in our estimate of proved
reserves in New Zealand was approximately 37 Bcfe.
Any significant variance from the assumptions used could result in the
actual amounts of oil and gas ultimately recovered and future net cash flows
being materially different from the estimates in our reserve reports. In
addition, results of drilling, testing, production and changes in prices after
the date of the estimate may result in substantial downward revisions. These
estimates may not accurately predict the present value of net cash flows from
oil and gas reserves.
3
Atfinancial statements
at December 31, 2001 approximately 50%and for prior periods, the rights of our estimated proved reserves
were undeveloped. Recovery of undeveloped reserves generally requires
significant capital expenditures and successful drilling operations. The reserve
data assumes that we can and will make these expenditures and conduct these
operations successfully, which may not occur.
We incurred a write down of the carrying values of our properties in the fourth
quarter of 2001 and could incur additional write downs in the future.
Under the full cost method of accounting, SEC accounting rules require that
on a quarterly basis we review the carrying value of our oil and gas properties
on a country by country basis for possible write down or impairment. Under these
rules, capitalized costs of proved reserves may not exceed a ceiling calculated
at the present value of estimated future net revenues from those proved
reserves, determined using a 10% per year discount and unescalated prices in
effect as of the end of each fiscal quarter. Capital costs in excess of the
ceiling must be permanently written down.
We recorded an after-tax, non-cash charge during the fourth quarter of 2001
of $63.5 million. This type of write down results in a charge to earnings and a
reduction of shareholders' equity, but does not impact our cash flow from
operating activities. Once incurred, write downs are not reversible at a later
date. If commodity prices continue to decline or if we have downward oil and gas
reserve revisions, we could incur additional write downs in the future. See "The
Company."
Reserves on properties we buy may not meet our expectations and could change the
nature of our business.
Property acquisition decisions are based on various assumptions and
subjective judgments that are speculative. Although available geological and
geophysical information can provide information about the potential of a
property, it is impossible to predict accurately a property's production and
profitability. Furthermore, future acquisitions may change the nature of our
operations and business.
In addition, we may have difficulty integrating future acquisitions into
our operations, and they may not achieve our desired profitability objectives.
Likewise, as is customary in the industry, we generally acquire oil and gas
acreage without any warranty of title except through the transferor. In many
instances, title opinions are not obtained if,investors in our
judgment, it wouldsecurities to assert claims against Arthur Andersen LLP will be uneconomical or impractical to do so. Losses may result from title defects or
from defects in the assignment of leasehold rights. While our current operations
are primarily in Texas, Louisiana and New Zealand, we may pursue acquisitions of
properties located in other geographic areas, which would decrease our
geographical concentration, and could also be in areas in which we have no or
limited experience.
We may have difficulty competing for oil and gas properties or supplies.
We operate in a highly competitive environment, competing with major
integrated and independent energy companies for desirable oil and gas
properties, as well as for the equipment, labor and materials required to
develop and operate such properties. Many of these competitors have financial
and technological resources substantially greater than ours. The market for oil
and gas properties is highly competitive and we may lack technological
information or expertise available to other bidders. We may incur higher costs
or be unable to acquire and develop desirable properties at costs we consider
reasonablelimited. For
example, because of this competition.
4
Governmental regulations are costly and complex, especially regulations relatinglack of consent, you will not be able to environmental protection.
Our exploration, production and marketing operations are regulated
extensively at the international, federal, state and local levels. These laws
and regulations affect the costs, manner and feasibility of our operations. As
an owner and operator of oil and gas properties, we are subject to
international, federal, state and local laws and regulations relating to
discharge of materials into, and protectionsue Arthur
Andersen LLP under Section 11(a)(4) of the environment. We have made
and will continue to make significant expendituresSecurities Act for any untrue
statement of a material fact contained in our efforts to comply with
the requirements of these environmental laws and regulations, which may impose
liability on us for the cost of pollution clean-up resulting from operations,
subject us to liability for pollution damages and require suspensionfinancial statements audited by
Arthur Andersen LLP or cessation of operations in affected areas. Changes in or additions to laws and
regulations regarding the protection of the environment could increase our
compliance costs and might hurt our business.
We are subjectany omissions to state and local regulations domestically and are subject
to New Zealand regulations that impose permitting, reclamation, land use,
conservation and other restrictions on our ability to drill and produce. These
laws and regulations can require well and facility sitesa material fact required to be
closed and
reclaimed. We frequently buy and sell interestsstated in properties that have been
operated in the past, and as a result of these transactions we may retain or
assume clean-up or reclamation obligations for our own operations or those of
third parties.
We may be exposed to financial and other liabilities as the general partner in
71 limited partnerships.
We currently serve as the managing general partner of 71 limited
partnerships, all but six of which are in the process of liquidating and
terminating their operations. We are contingently liable for our obligations as
a general partner, including any liabilities that cannot be repaid from
partnership assets or insurance proceeds. In the future, we may be exposed to
litigation in connection with the partnerships.
We are exposed to the risk of financial non-performance by customers.
Our ability to collect on sales to our customers is dependent on the
liquidity of our customer base.
5
statements.
FORWARD-LOOKING STATEMENTS
Some of the information included in this prospectus, any prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements. Forward-looking statements use forward-looking terms
such as "believe," "expect," "may," "intend," "will," "project," "budget,"
"should" or "anticipate" or other similar words. These statements discuss
"forward-looking" information such as:
o anticipated capital expenditures and budgets;
o future cash flows and borrowings;
o pursuit of potential future acquisition or drilling opportunities; and
o sources of funding for exploration and development.
3
These forward-looking statements are based on assumptions that we believe
are reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:
o fluctuations of the prices received or demand for oil and natural gas;
o uncertainty of drilling results, reserve estimates and reserve
replacement;
o operating hazards;
o acquisition risks;
o unexpected substantial variances in capital requirements;
o environmental matters; o acts of war or terrorism; and
o general economic conditions.
Other factors that could cause actual results to differ materially from
those anticipated are discussed in our periodic filings with the SEC, including
our Annual Report on Form 10-K for the year ended December 31, 2001.2002.
When considering these forward-looking statements, you should keep in mind
the risk factors and other cautionary statements in this prospectus, any
prospectus supplement and the documents we have incorporated by reference. We
will not update these forward-looking statements unless the securities laws
require us to do so.
THE COMPANY
Swift Energy Company, a Texas corporation, engagesis engaged in developing,
exploring, acquiring, and operating oil and gas properties, with a focus on
onshore and inland waters oil and natural gas reserves in Texas and Louisiana
and onshore oil and natural gas reserves in New Zealand. 6As of December 31, 2002, we had
interests in 932 oil and gas wells located in three states, in federal offshore
waters and in New Zealand. We operated 820 of these wells, representing 95% of
our proved reserves. At year-end 2002, our estimated proved reserves were 749.4
Bcfe, of which approximately 44% was natural gas, 42% crude oil, and 14% natural
gas liquids, and overall 60% of these reserves were proved developed. Our proved
reserves at that date were concentrated 41% in Texas, 35% in Louisiana and 21%
in New Zealand.
Our core domestic areas for development and exploration drilling are the
Lake Washington Area located in South Louisiana, the AWP Olmos Area located in
South Texas, the Brookeland Area located in East Texas and the Masters Creek
Area in Central Louisiana. The Lake Washington Area accounted for approximately
25% of our proved reserves as of December 31, 2002 and approximately 21% of our
production for the nine months ended September 30, 2003, while the AWP Olmos
Field accounted for approximately 30% of our proved reserves as of December 31,
2002 and approximately 16% of our production for the nine months ended September
30, 2003. New Zealand accounted for approximately 21% of our proved reserves as
of December 31, 2002 and 37% of our production for the nine months ended
September 30, 2003 and the Masters Creek Area accounted for approximately 10% of
proved reserves as of December 31, 2002 and 12% of our production for the nine
months ended September 30, 2003. Our net sales volume for the nine months ended
September 30, 2003 was 39.8 Bcfe of which 54% was natural gas.
4
Year-end 2001We have increased our proved reserves quantities increased approximately 3% from 629.4361.5 Bcfe at year-end 20001997 to
645.8749.4 Bcfe with a reserve replacement rate of 137% of
2001 production. The 62.1 Bcfe of proved developed reserves as estimated at December 31, 2001, associated with the TAWN assets we acquired in New Zealand in
Januaryyear-end 2002, were not included in our 2001 year-end reserve report. The reserves
associated with the acquisition of assets from Antrim Energy Inc. in March 2002
were also not reflected in our 2001 year-end reserve report.
We focus our businesswhich has resulted in the following core areas:
Net Proved Reserves and Production as of Year-End 2001
-----------------------------------------------------------------
Area Location Reserves Percent Production
of
Quantities Proved
(Bcfe) Reserves (Bcfe)
- --------------------- --------------------- ------------------ -------------------- ------------------
AWP Olmos South Texas 207.5 32% 13.0
Masters Creek Western Louisiana 104.7 16% 15.3
Lake Washington Southern Louisiana 72.5 11% 1.2
Brookeland East Texas 59.1 9% 6.5
Rimu/Kauri New Zealand 101.9 16% 0.5
Other 100.1 16% 8.3
------------------ -------------------- ------------------
Total 645.8 100% 44.8
================== ==================== ==================
replacement of 278% of
our production during the same period. Our five-year average reserves
replacement costs were $1.25 per Mcfe. In 2002, we increased our proved reserves
by 16%, which replaced 308% of our 2002 production. We have a well-balanced portfolioincreased our
production from 25.4 Bcfe at year-end 1997 to 49.8 Bcfe at year-end 2002.
Primarily due to increased production, this has resulted in average annual
growth in net cash provided by operating activities of oil and gas properties and prospects.
The AWP Olmos and Lake Washington areas are characterized by long-lived reserves
that we expect5% per year from year-end
1997 to produce steadily over a long period of time. The Masters Creek
and Brookeland areas are characterized by shorter-lived reserves with high
initial rates of production that decline more rapidly.year-end 2002.
Swift's philosophy is to pursue a balanced growth strategy that includes an
active drilling program, strategic acquisitions, and the utilization of advanced
technologies. OverWe seek to increase our reserves through both drilling and
acquisitions, shifting the past five fiscal years we have spent an average of 11% of
our capital expenditure budget on exploration drilling, 51% on developmentbalance between the two activities 19% on proved property acquisitions and 14% on lease acquisitions.
Our strategy isin response to
grow through drilling on our core properties and in emerging
growth areasmarket conditions. For example, when oil and gas prices are strong, with a shift toward
acquisitions when prices weaken. We believe this balanced approach has resulted
in our ability to grow reserves in a relatively low, cost manner, while
participating in the upside potential of exploration. Over the five-year period
ended December 31, 2001, we replaced 302% of our production at an average cost
of $1.26 per Mcfe.
Capital expenditures for development and exploration drilling were $44
million in 1999 and $115.5 million in 2000, while the amounts spent for
acquisitions were $20.6 million in 1999 and $33.4 million in 2000. In 2001
drilling expenditures totaled $183.2 million, while $40.5 million was spent to
acquirefocus upon
acquiring producing properties. For 2002, our capital expenditures, excluding the
net effect of acquisitions and dispositions, are currently expected to range
from approximately $90.0 million to $106.0 million.
We recorded a domestic, non-cash, full cost ceiling adjustment during the
fourth quarter of 2001. This domestic $98.9 million pre-tax charge ($63.5
million after-tax) resulted from the application of ceiling test rules as
prescribed by the SEC for companies that follow the full cost method of
accounting. Under the full cost method of accounting, a company's net book value
of itsWhen oil and gas properties, less related deferred income taxes, may not
exceed a calculated "ceiling." Ifprices are high, we shift our
focus to drilling wells.
In the capitalized costs exceed this ceiling,first nine months of 2003, we drilled or participated in drilling
approximately 48 domestic development wells and seven domestic exploratory
wells, where 42 of the excess capitalized costs must be written downdevelopment wells and expensed. Full cost companies
must usefive exploratory wells were in the
prices in effect atLake Washington area. Five domestic exploratory wells and 40 of the end of each quarter to calculate the
ceiling value of reserves.
7
Our credit facility of $190.0 million, with a borrowing base of $275.0
million expires on October 1, 2005.domestic
development wells were completed.
Our principal executive offices are located at 16825 Northchase Drive,
Suite 400, Houston, Texas 77060 and our telephone number is (281) 874-2700.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges:
Year Ended December 31,
Nine Months Ended ----------------------------------------------
September 30, 2003 2002 2001(1) 2000 1999 1998(2)
------------------ ---- ------- ---- ---- -------
Ratio of earnings to fixed charges 2.32x 1.38x -- 5.18x 2.39x --
For purposes of calculating the ratio of earnings to fixed charges, fixed
charges include interest expense net (which includes amortization of debt
issuance costs and discounts), capitalized interest and that portion of
non-capitalized rental expense deemed to be the equivalent of interest. Earnings
represent income before income taxes and cumulative effect of change in
accounting principle and from continuing operations before fixed charges
(excluding capitalized interest, net of depletion). Due to the $90.8 million
non-cash charge incurred in the third quarter of 1998 caused by a write-down in
the carrying value of oil and gas properties, 1998 earnings were insufficient by
$76.9 million to cover fixed charges in this period. If the $90.8 million
non-cash charge is excluded, the ratio of earnings to fixed charges would have
been for 2.09 for 1998.
5
USE OF PROCEEDS
Marabella and other selling shareholders, if any, willUnless we specify otherwise in an accompanying prospectus supplement, we
intend to use the net proceeds we receive all of the
proceeds from the sale of the shares beingsecurities offered by
this prospectus and the accompanying prospectus supplement for the repayment of
debt and for general corporate purposes. General corporate purposes may include
additions to working capital, development and exploration expenditures or the
financing of possible acquisitions.
The net proceeds may be invested temporarily until they are used for their
stated purpose.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities which may be offered by us from time to time. The applicable
prospectus supplement will describe the specific terms of the debt securities
offered by that prospectus supplement.
We may issue debt securities either separately or together with, or upon
the conversion of, or in exchange for, other securities. The debt securities are
to be either senior obligations of ours issued in one or more series and
referred to herein as the "Senior Debt Securities," or subordinated obligations
of ours issued in one or more series and referred to herein as the "Subordinated
Debt Securities." The Senior Debt Securities and the Subordinated Debt
Securities are collectively referred to as the "Debt Securities." The Debt
Securities will be general obligations of the Company. Each series of Debt
Securities will be issued under an agreement, or "Indenture," between Swift and
an independent third party, usually a bank or trust company, known as a
"Trustee," who will be legally obligated to carry out the terms of the
Indenture. The name(s) of the Trustee(s) will be set forth in the applicable
prospectus supplement. We may issue all the Debt Securities under the same
Indenture, as one or as separate series, as specified in the applicable
prospectus supplement(s).
This summary of certain terms and provisions of the Debt Securities and
Indentures is not complete. If we refer to particular provisions of an
Indenture, the provisions, including definitions of certain terms, are
incorporated by reference as a part of this summary. The Indentures are or will
be filed as an exhibit to the registration statement of which this prospectus is
a part, or as exhibits to documents filed under the Securities Exchange Act of
1934, which are incorporated by reference into this prospectus. WeThe Indentures
are subject to and governed by the Trust Indenture Act of 1939, as amended. You
should refer to the applicable Indenture for the provisions that may be
important to you.
General
The Indentures will not receivelimit the amount of Debt Securities that we may
issue. We may issue Debt Securities up to an aggregate principal amount as we
may authorize from time to time. The applicable prospectus supplement will
describe the terms of any Debt Securities being offered, including:
o the title and aggregate principal amount;
o the date(s) when principal is payable;
o the interest rate, if any, and the method for calculating the interest
rate;
o the interest payment dates and the record dates for the interest
payments;
o the places where the principal and interest will be payable;
6
o any mandatory or optional redemption or repurchase terms or
prepayment, conversion, sinking fund or exchangeability or
convertibility provisions;
o whether such Debt Securities will be Senior Debt Securities or
Subordinated Debt Securities and, if Subordinated Debt Securities, the
subordination provisions and the applicable definition of "Senior
Indebtedness";
o additional provisions, if any, relating to the defeasance and covenant
defeasance of the Debt Securities;
o if other than denominations of $1,000 or multiples of $1,000, the
denominations the Debt Securities will be issued in;
o whether the Debt Securities will be issued in the form of Global
Securities, as defined below, or certificates;
o whether the Debt Securities will be issuable in registered form,
referred to as "Registered Securities," or in bearer form, referred to
as "Bearer Securities" or both and, if Bearer Securities are issuable,
any restrictions applicable to the exchange of one form for another
and the offer, sale and delivery of Bearer Securities;
o any applicable material federal tax consequences;
o the dates on which premiums, if any, will be payable;
o our right, if any, to defer payment of interest and the maximum length
of such deferral period;
o any paying agents, transfer agents, registrars or trustees;
o any listing on a securities exchange;
o if convertible into common stock or preferred stock, the terms on
which such Debt Securities are convertible;
o the terms, if any, of the transfer, mortgage, pledge, or assignment as
security for any series of Debt Securities of any properties, assets,
proceeds, securities or other collateral, including whether certain
provisions of the Trust Indenture Act are applicable, and any
corresponding changes to provisions of the Indenture as currently in
effect;
o the initial offering price; and
o other specific terms, including covenants and any additions or changes
to the events of default provided for with respect to the Debt
Securities.
The terms of the Debt Securities of any series may differ and, without the
consent of the holders of the Debt Securities of any series, we may reopen a
previous series of Debt Securities and issue additional Debt Securities of such
series or establish additional terms of such series, unless otherwise indicated
in the applicable prospectus supplement.
7
Non U.S. Currency
If the purchase price of any Debt Securities is payable in a currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any currency other than U.S.
dollars, the specific terms with respect to such Debt Securities and such
foreign currency will be specified in the applicable prospectus supplement.
Original Issue Discount Securities
Debt Securities may be issued as "Original Issue Discount Securities" to be
sold at a substantial discount below their principal amount. Original Issue
Discount Securities may include "zero coupon" securities that do not pay any
cash interest for the entire term of the securities. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder thereof upon such acceleration will be determined in the
manner described in the applicable prospectus supplement. Conditions pursuant to
which payment of the principal of the Subordinated Debt Securities may be
accelerated will be set forth in the applicable prospectus supplement. Material
federal income tax and other considerations applicable to Original Issue
Discount Securities will be described in the applicable prospectus supplement.
Covenants
Under the Indentures, we will be required to:
o pay the principal, interest and any premium on the Debt Securities
when due;
o maintain a place of payment;
o deliver a report to the Trustee at the end of each fiscal year
reviewing our obligations under the Indentures; and
o deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
Any additional covenants will be described in the applicable prospectus
supplement.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in a prospectus supplement, each series of Debt
Securities will be issued in registered form only, without coupons. The
Indentures, however, provide that we may also issue Debt Securities in bearer
form only, or in both registered and bearer form. Bearer Securities shall not be
offered, sold, resold or delivered in connection with their original issuance in
the United States or to any United States person other than offices located
outside the United States of certain United States financial institutions.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States, any estate the income of which is subject to United
States federal income taxation regardless of its source, or any trust whose
administration is subject to the primary supervision of a United States court
and which has one or more United States fiduciaries who have the authority to
control all substantial decisions of the trust. "United States" means the United
States of America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Bearer Securities will be subject to certification procedures and
may be affected by certain limitations under United States tax laws. Such
procedures and limitations will be described in the prospectus supplement
relating to the offering of the Bearer Securities.
8
Unless otherwise indicated in a prospectus supplement, Registered
Securities will be issued in denominations of $1,000 or any integral multiple
thereof, and Bearer Securities will be issued in denominations of $5,000.
Unless otherwise indicated in a prospectus supplement, the principal,
premium, if any, and interest, if any, of or on the Debt Securities will be
payable, and Debt Securities may be surrendered for registration of transfer or
exchange, at an office or agency to be maintained by us in the Borough of
Manhattan, The City of New York, provided that payments of interest with respect
to any Registered Security may be made at our option by check mailed to the
address of the person entitled to payment or by transfer to an account
maintained by the payee with a bank located in the United States. No service
charge shall be made for any registration of transfer or exchange of Debt
Securities, but we may require payment of a sum sufficient to cover any tax or
other governmental charge and any other expenses that may be imposed in
connection with the exchange or transfer.
Unless otherwise indicated in a prospectus supplement, payment of principal
of, premium, if any, and interest, if any, on Bearer Securities will be made,
subject to any applicable laws and regulations, at such office or agency outside
the United States as specified in the prospectus supplement and as we may
designate from time to time. Unless otherwise indicated in a prospectus
supplement, payment of interest due on Bearer Securities on any interest payment
date will be made only against surrender of the coupon relating to such interest
payment date. Unless otherwise indicated in a prospectus supplement, no payment
of principal, premium or interest with respect to any Bearer Security will be
made at any office or agency in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States; except that if amounts owing with respect to any
Bearer Securities shall be payable in U.S. dollars, payment may be made at the
Corporate Trust Office of the applicable Trustee or at any office or agency
designated by us in the Borough of Manhattan, The City of New York, if (but only
if) payment of the full amount of such principal, premium or interest at all
offices outside of the United States maintained for such purpose by us is
illegal or effectively precluded by exchange controls or similar restrictions.
Unless otherwise indicated in the applicable prospectus supplement, we will
not be required to:
o issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days
before any selection of Debt Securities of that series of like tenor
to be redeemed and ending at the close of business on the day of that
selection;
o register the transfer of or exchange any Registered Security, or
portion thereof, called for redemption, except the unredeemed portion
of any Registered Security being redeemed in part;
o exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and like
tenor that is simultaneously surrendered for redemption; or
o issue, register the transfer of or exchange any Debt Security which
has been surrendered for repayment at the option of the holder, except
the portion, if any, of the Debt Security not to be so repaid.
9
Ranking of Debt Securities
The Senior Debt Securities will be unsubordinated obligations of ours and
will rank equally in right of payment with all other unsubordinated indebtedness
of ours. The Subordinated Debt Securities will be obligations of ours and will
be subordinated in right of payment to all existing and future Senior
Indebtedness. The prospectus supplement will describe the subordination
provisions and set forth the definition of "Senior Indebtedness" applicable to
the Subordinated Debt Securities, and will set forth the approximate amount of
such Senior Indebtedness outstanding as of a recent date.
Global Securities
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities that will be deposited with, or on
behalf of, a "Depository" identified in the prospectus supplement relating to
such series. Global Debt Securities may be issued in either registered or bearer
form and in either temporary or permanent form. Unless and until it is exchanged
in whole or in part for individual certificates evidencing Debt Securities, a
Global Debt Security may not be transferred except as a whole:
o by the Depository to a nominee of such Depository;
o by a nominee of such Depository to such Depository or another nominee
of such Depository; or
o by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Global Debt Securities and certain limitations and restrictions relating to a
series of Global Bearer Securities will be described in the applicable
prospectus supplement.
Outstanding Debt Securities
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any authorization, demand, direction,
notice, consent or waiver under the relevant Indenture, the amount of
outstanding Debt Securities will be calculated based on the following:
o the portion of the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding for such purposes
shall be that portion of the principal amount thereof that could be
declared to be due and payable upon a declaration of acceleration
pursuant to the terms of such Original Issue Discount Security as of
the date of such determination;
o the principal amount of a Debt Security denominated in a currency
other than U.S. dollars shall be the U.S. dollar equivalent,
determined on the date of original issue of such Debt Security, of the
principal amount of such Debt Security; and
o any Debt Security owned by us or any obligor on such Debt Security or
any affiliate of us or such other obligor shall be deemed not to be
outstanding.
10
Redemption and Repurchase
The Debt Securities may be redeemable at our option, may be subject to
mandatory redemption pursuant to a sinking fund or otherwise, or may be subject
to repurchase by Swift at the option of the holders, in each case upon the
terms, at the times and at the prices set forth in the applicable prospectus
supplement.
Conversion and Exchange
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for common stock, preferred stock, or other Debt Securities
will be set forth in the applicable prospectus supplement. Such terms of
conversion or exchange may be either mandatory, at the option of the holders, or
at our option.
Consolidation, Merger and Sale of Assets
Each Indenture generally will permit a consolidation or merger between us
and another corporation, if the surviving corporation meets certain limitations
and conditions. Subject to those conditions, each Indenture may also permit the
sale by us of all or substantially all of our property and assets. If this
happens, the remaining or acquiring corporation shall assume all of our
responsibilities and liabilities under the Indentures including the payment of
all amounts due on the Debt Securities and performance of the shares.covenants in the
Indentures.
We are only permitted to consolidate or merge with or into any other
corporation or sell all or substantially all of our assets according to the
terms and conditions of the Indentures, as indicated in the applicable
prospectus supplement. The remaining or acquiring corporation will be
substituted for us in the Indentures with the same effect as if it had been an
original party to the Indenture. Thereafter, the successor corporation may
exercise our rights and powers under any Indenture, in our name or in its own
name. Any act or proceeding required or permitted to be done by our board of
directors or any of our officers may be done by the board or officers of the
successor corporation.
Events of Default
Unless otherwise specified in the applicable prospectus supplement, an
Event of Default, as defined in the Indentures and applicable to Debt Securities
issued under such Indentures, typically will occur with respect to the Debt
Securities of any series under the Indenture upon:
o default for a period to be specified in the applicable prospectus
supplement in payment of any interest with respect to any Debt
Security of such series;
o default in payment of principal or any premium with respect to any
Debt Security of such series when due upon maturity, redemption,
repurchase at the option of the holder or otherwise;
o default in deposit of any sinking fund payment when due with respect
to any Debt Security of such series;
o default by us in the performance, or breach, of any other covenant or
warranty in such Indenture, which shall not have been remedied for a
period to be specified in the applicable prospectus supplement after
notice to us by the applicable Trustee or the holders of not less than
a fixed percentage in aggregate principal amount of the Debt
Securities of all series issued under the applicable Indenture;
11
o certain events of bankruptcy, insolvency or reorganization of Swift;
or
o any other Event of Default that may be set forth in the applicable
prospectus supplement, including an Event of Default based on other
debt being accelerated, known as a "cross-acceleration."
No Event of Default with respect to any particular series of Debt
Securities necessarily constitutes an Event of Default with respect to any other
series of Debt Securities. If the Trustee considers it in the interest of the
holders to do so, the Trustee under an Indenture may withhold notice of the
occurrence of a default with respect to the Debt Securities to the holders of
any series outstanding, except a default in payment of principal, premium, if
any, interest, if any.
Each Indenture will provide that if an Event of Default with respect to any
series of Debt Securities issued thereunder shall have occurred and be
continuing, either the relevant Trustee or the holders of at least a fixed
percentage in principal amount of the Debt Securities of such series then
outstanding may declare the principal amount of all the Debt Securities of such
series to be due and payable immediately. In the case of Original Issue Discount
Securities, the Trustee may declare as due and payable such lesser amount as may
be specified in the applicable prospectus supplement. However, upon certain
conditions, such declaration and its consequences may be rescinded and annulled
by the holders of at least a fixed percentage in principal amount of the Debt
Securities of all series issued under the applicable Indenture.
The applicable prospectus supplement will provide the terms pursuant to
which an Event of Default shall result in acceleration of the payment of
principal of Subordinated Debt Securities.
In the case of a default in the payment of principal of, or premium, if
any, or interest, if any, on any Subordinated Debt Securities of any series, the
applicable Trustee, subject to certain limitations and conditions, may institute
a judicial proceeding for the collection thereof.
No holder of any of the Debt Securities of any series will have any right
to institute any proceeding with respect to the Indenture or any remedy
thereunder, unless the holders of at least a fixed percentage in principal
amount of the outstanding Debt Securities of such series:
o have made written request to the Trustee to institute such proceeding
as Trustee, and offered reasonable indemnity to the Trustee,
o the Trustee has failed to institute such proceeding within the time
period specified in the applicable prospectus supplement after receipt
of such notice, and
o the Trustee has not within such period received directions
inconsistent with such written request by holders of a majority in
principal amount of the outstanding Debt Securities of such series.
Such limitations do not apply, however, to a suit instituted by a
holder of a Debt Security for the enforcement of the payment of the
principal of, premium, if any, or any accrued and unpaid interest on,
the Debt Security on or after the respective due dates expressed in
the Debt Security.
12
During the existence of an Event of Default under an Indenture, the Trustee
is required to exercise such rights and powers vested in it under the Indenture
and use the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs. Subject to the provisions of the Indenture relating to the duties
of the Trustee, if an Event of Default shall occur and be continuing, the
Trustee is under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
certain provisions concerning the rights of the Trustee, the holders of at least
a fixed percentage in principal amount of the outstanding Debt Securities of any
series have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any power
conferred on the Trustee with respect to such series.
The Indentures provide that the Trustee will, within the time period
specified in the applicable prospectus supplement after the occurrence of any
default, give to the holders of the Debt Securities of such series notice of
such default known to it, unless such default shall have been cured or waived;
provided that the Trustee shall be protected in withholding such notice if it
determines in good faith that the withholding of such notice is in the interest
of such holders, except in the case of a default in payment of principal of or
premium, if any, on any Debt Security of such series when due or in the case of
any default in the payment of any interest on the Debt Securities of such
series.
Swift is required to furnish to the Trustee annually a statement as to
compliance with all conditions and covenants under the Indentures.
Modification and Waivers
From time to time, when authorized by resolutions of our board of directors
and by the Trustee, without the consent of the holders of Debt Securities of any
series, we may amend, waive or supplement the Indentures and the Debt Securities
of such series for certain specified purposes, including, among other things:
o to cure ambiguities, defects or inconsistencies;
o to provide for the assumption of our obligations to holders of the
Debt Securities of such series in the case of a merger or
consolidation;
o to add to our Events of Default or our covenants or to make any change
that would provide any additional rights or benefits to the holders of
the Debt Securities of such series;
o to add or change any provisions of such Indenture to facilitate the
issuance of Bearer Securities;
o to establish the form or terms of Debt Securities of any series and
any related coupons;
o to add guarantors with respect to the Debt Securities of such series;
o to secure the Debt Securities of such series;
o to maintain the qualification of the Indenture under the Trust
Indenture Act; or
o to make any change that does not adversely affect the rights of any
holder.
Other amendments and modifications of the Indentures or the Debt Securities
issued thereunder may be made by Swift and the Trustee with the consent of the
holders of not less than a fixed percentage of the aggregate principal amount of
the outstanding Debt Securities of each series affected, with each series voting
as a separate class; provided that, without the consent of the holder of each
outstanding Debt Security affected, no such modification or amendment may:
13
o reduce the principal amount of, or extend the fixed maturity of the
Debt Securities, or alter or waive any redemption, repurchase or
sinking fund provisions of the Debt Securities;
o reduce the amount of principal of any Original Issue Discount
Securities that would be due and payable upon an acceleration of the
maturity thereof;
o change the currency in which any Debt Securities or any premium or the
accrued interest thereon is payable;
o reduce the percentage in principal amount outstanding of Debt
Securities of any series which must consent to an amendment,
supplement or waiver or consent to take any action under the Indenture
or the Debt Securities of such series;
o impair the right to institute suit for the enforcement of any payment
on or with respect to the Debt Securities;
o waive a default in payment with respect to the Debt Securities or any
guarantee;
o reduce the rate or extend the time for payment of interest on the Debt
Securities;
o adversely affect the ranking of the Debt Securities of any series;
o release any guarantor from any of its obligations under its guarantee
or the Indenture, except in compliance with the terms of the
Indenture; or
o solely in the case of a series of Subordinated Debt Securities, modify
any of the applicable subordination provisions or the applicable
definition of Senior Indebtedness in a manner adverse to any holders.
The holders of a fixed percentage in aggregate principal amount of the
outstanding Debt Securities of any series may waive compliance by us with
certain restrictive provisions of the relevant Indenture, including any set
forth in the applicable prospectus supplement. The holders of a fixed percentage
in aggregate principal amount of the outstanding Debt Securities of any series
may, on behalf of the holders of that series, waive any past default under the
applicable Indenture with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest, if
any, on any Debt Securities of such series, or in respect of a covenant or
provision which cannot be modified or amended without the consent of a larger
fixed percentage of holders or by the holder of each outstanding Debt Securities
of the series affected.
14
Discharge, Termination and Covenant Termination
When we establish a series of Debt Securities, we may provide that such
series is subject to the termination and discharge provisions of the applicable
Indenture. If those provisions are made applicable, we may elect either:
o to terminate and be discharged from all of our obligations with
respect to those Debt Securities subject to some limitations; or
o to be released from our obligations to comply with specified covenants
relating to those Debt Securities, as described in the applicable
prospectus supplement.
To effect that termination or covenant termination, we must irrevocably
deposit in trust with the relevant Trustee an amount which, through the payment
of principal and interest in accordance with their terms, will provide money
sufficient to make payments on those Debt Securities and any mandatory sinking
fund or similar payments on those Debt Securities. This deposit may be made in
any combination of funds or government obligations. On such a termination, we
will not be released from certain of our obligations that will be specified in
the applicable prospectus supplement.
To establish such a trust we must deliver to the relevant Trustee an
opinion of counsel to the
o will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the termination or covenant termination; and
o will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if the
termination or covenant termination had not occurred.
If we effect covenant termination with respect to any Debt Securities, the
amount of deposit with the relevant Trustee must be sufficient to pay amounts
due on the Debt Securities at the time of their stated maturity. However, those
Debt Securities may become due and payable prior to their stated maturity if
there is an Event of Default with respect to a covenant from which we have not
been released. In that event, the amount on deposit may not be sufficient to pay
all amounts due on the Debt Securities at the time of the acceleration.
The applicable prospectus supplement may further describe the provisions,
if any, permitting termination or covenant termination, including any
modifications to the provisions described above.
Governing Law
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
Regarding the Trustees
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. Each Trustee is permitted to engage in other
transactions with us from time to time, provided that if such Trustee acquires
any conflicting interest, it must eliminate such conflict upon the occurrence of
an Event of Default under the relevant Indenture, or else resign.
15
DESCRIPTION OF CAPITAL STOCK
General
As of the date of this prospectus, we are authorized to issue up to
90,000,000 shares of stock, including up to 85,000,000 shares of common stock
and up to 5,000,000 shares of preferred stock. As of the close of business on
AugustOctober 31, 2002,2003, we had
26,893,06927,444,262 shares of common stock and no shares of preferred stock outstanding.
As of August 31, 2002,September 30, 2003, we also had approximately 2,753,9092.9 million shares of common
stock subject toreserved for issuance upon exercise of outstanding options.options or in
connection with other awards outstanding under various employee or director
incentive, compensation and option plans.
The following is a summary of the key terms and provisions of our equity
securities. You should refer to the applicable provisions of our articles of
incorporation, bylaws, the Texas Business Corporation Act and the documents we
have incorporated by reference for a complete statement of the terms and rights
of our capital stock.
Common Stock
Voting Rights. Each holder of common stock is entitled to one vote per
share. Subject to the rights, if any, of the holders of any series of preferred
stock pursuant to applicable law or the provision of the certificate of
designation creating that series, all voting rights are vested in the holders of
shares of common stock. Holders of shares of common stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors, and the
holders of the remaining shares voting for the election of directors will not be
able to elect any directors.
Dividends. Dividends may be paid to the holders of common stock when, as
and if declared by the board of directors out of funds legally available for
their payment, subject to the rights of holders of any preferred stock. Swift
has never declared a cash dividend and intends to continue its policy of using
retained earnings for expansion of its business.
Rights upon Liquidation. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally, in proportion to the number of shares of common stock
held by them, in any of our assets available for distribution after the payment
in full of all debts and distributions and after the holders of all series of
outstanding preferred stock, if any, have received their liquidation preferences
in full.
Non-Assessable. All outstanding shares of common stock are fully paid and
non-assessable, including thenon-assessable. Any additional common stock being offeredwe offer and issue under this
prospectus.
8
Prospectus will also be fully paid and non-assessable.
No Preemptive Rights. Holders of common stock are not entitled to
preemptive purchase rights in future issuancesofferings of our common stock.
Listing. Our outstanding shares of common stock including the shares being
offered using this prospectus, are listed on the New York
Stock Exchange and the Pacific Stock Exchange under the symbol "SFY." Any
additional common stock we issue will also be listed on the NYSE and the PSE.
16
Preferred Stock
Our board of directors can, without approval of our shareholders, issue one
or more series of preferred stock and determine the number of shares of each
series and the rights, preferences and limitations of each series. The following
description of the terms of the preferred stock sets forth certain general terms
and provisions of our authorized preferred stock. If we offer preferred stock, a
description will be filed with the SEC and the specific designations and rights
will be described in a prospectus supplement, including the following terms:
o the series, the number of shares offered and the liquidation value of
the preferred stock;
o the price at which the preferred stock will be issued;
o the dividend rate, the dates on which the dividends will be payable
and other terms relating to the payment of dividends on the preferred
stock;
o the liquidation preference of the preferred stock;
o the voting rights of the preferred stock;
o whether the preferred stock is redeemable or subject to a sinking
fund, and the terms of any such redemption or sinking fund;
o whether the preferred stock is convertible or exchangeable for any
other securities, and the terms of any such conversion; and
o any additional rights, preferences, qualifications, limitations and
restrictions of the preferred stock.
The description of the terms of the preferred stock to be set forth in an
applicable prospectus supplement will not be complete and will be subject to and
qualified in its entirety by reference to the certificate of designation
relating to the applicable series of preferred stock. The registration statement
of which this prospectus forms a part will include the certificate of
designation as an exhibit or incorporate it by reference.
Undesignated preferred stock may enable our board of directors to render
more difficult or to discourage an attempt to obtain control of us by means of a
tender offer, proxy contest, merger or otherwise, and to thereby protect the
continuity of our management. The issuance of shares of preferred stock may
adversely affect the rights of the holders of our common stock. For example, any
preferred stock issued may rank prior to our common stock as to dividend rights,
liquidation preference or both, may have full or limited voting rights and may
be convertible into shares of common stock. As a result, the issuance of shares
of preferred stock may discourage bids for our common stock or may otherwise
adversely affect the market price of our common stock or any existing preferred
stock.
Any preferred stock will, when issued, be fully paid and non-assessable.
17
Anti-takeover Provisions
Certain provisions in our articles of incorporation, bylaws and our
shareholders' rights plan may encourage persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with our board of
directors rather than pursue non-negotiated takeover attempts.
Our Classified Board of Directors. Our bylaws provide that our board of
directors is divided into three classes as nearly equal in number as possible.
The directors of each class are elected for three-year terms, and the terms of
the three classes are staggered so that directors from a single class are
elected at 9
each annual meeting of shareholders.stockholders. A staggered board makes it more
difficult for shareholders to change the majority of the directors and instead
promotes continuity of existing management.
Our Ability to Issue Preferred Stock. As discussed above, our board of
directors can set the voting rights, redemption rights, conversion rights and
other rights relating to authorized but unissued shares of preferred stock and
could issue that stock in either private or public transactions. Preferred stock
could be issued for the purpose of preventing a merger, tender offer or other
takeover attempt which the board of directors opposes.
Our Rights Plan. Our board of directors has adopted a shareholders'stockholders' rights
plan. The rights attach to all common stock certificates representing
outstanding shares. One right is issued for each share of common stock
outstanding. Each right entitles the registered holder, under the circumstances
described below, to purchase from us one one-thousandth of a share of our Series
A Junior Participating Preferred Stock, a "Series A" share, at a price of
$150.00 per one one-thousandth of a Series A share, subject to adjustment. The
dividend and liquidation rights and the non-redemption feature of the Series A
shares are designed so that the value of one one-thousandth of a Series A share
purchasable upon exercise of each right will approximate the value of one share
of common stock. The following is a summary of the terms of the rights plan. You
should refer to the applicable provisions of the rights plan which we have
incorporated by reference as an exhibit to the registration statement of which
this prospectus is a part.
The rights will separate from the common stock and rightsright certificates will
be distributed to the holders of common stock as of the earlier of:
o 10 business days following a public announcement that a person or
group of affiliated persons has acquired beneficial ownership of 15%
or more of our outstanding voting shares, or
o 10 business days following the commencement or announcement of an
intention to commence a tender offer or exchange offer which would
result in a person or group beneficially owning 15% or more of our
outstanding voting shares.
The rights are not exercisable until rights certificates are distributed.
The rights will expire on July 31, 2007 unless that date is extended or the
rights are earlier redeemed or exchanged.
18
If a person or group (with certain exceptions for investment advisers)
acquires 15% or more of our voting shares, each right then outstanding, other
than rights beneficially owned by such person or group, becomes a right to buy
that number of shares of common stock or other securities or assets having a
market value of two times the exercise price of the right. The rights belonging
to the acquiring person or group become null and void.
If Swift is acquired in a merger or other business combination, or 50% of
its consolidated assets or assets producing more than 50% of its earning power
or cash flow are sold, each holder of a right will have the right to receive
that number of shares of common stock of the acquiring company which at the time
of such transaction has a market value of two times the purchase price of the
right.
At any time after a person or group acquires beneficial ownership of 15% or
more of our outstanding voting shares and before the earlier of the two events
described in the prior paragraph or acquisition by a person or group of
beneficial ownership of 50% or more of our outstanding voting shares, our board
of directors may, at its option, exchange the rights, other than those owned by
such person or group, in whole or in part, at an exchange ratio of one share of
common stock or a fractional share of Series A stock or other preferred stock
equivalent in value thereto, per right.
10
The Series A shares issuable upon exercise of the rights will be
non-redeemable and rank junior to all other series of our preferred stock. Each
whole Series A share will be entitled to receive a quarterly preferential
dividend in an amount per share equal to the greater of $1.00 in cash, or in the
aggregate, 1,000 times the dividend declared on the common stock, subject to
adjustment. In the event of liquidation, the holders of Series A sharesshare may
receive a preferential liquidation payment equal to the greater of $1,000 per
share, or in the aggregate, 1,000 times the payment made on the shares of common
stock. In the event of any merger, consolidation or other transaction in which
the shares of common stock are exchanged for or changed into other stock or
securities, cash or other property, each whole Series A share will be entitled
to receive 1,000 times the amount received per share of common stock. Each whole
Series A share will be entitled to 1,000 votes on all matters submitted to a
vote of our shareholdersstockholders and Series A shares will generally vote together as one
class with the common stock and any other capital stock on all matters submitted
to a vote of our shareholders.stockholders.
Prior to the earlier of the date it is determined that rightsright certificates
are to be distributed or the expiration date of the rights, our board of
directors may redeem all, but not less than all, of the then outstanding rights
at a price of $0.01 per right. Our board of directors in its sole discretion may
establish the effective date and other terms and conditions of the redemption.
Upon redemption, the ability to exercise the rights will terminate and the
holders of rights will only be entitled to receive the redemption price.
As long as the rights are redeemable, we may amend the rights agreement in
any manner except to change the redemption price. After the rights are no longer
redeemable, we may, except with respect to the redemption price, amend the
rights agreement in any manner that does not adversely affect the interests of
holders of the rights.
19
Business Combinations Under Texas Law. Swift is a Texas corporation subject
to Part Thirteen of the Texas Business Corporation Act known as the "Business
Combination Law." In general, the Business Combination Law prevents an
affiliated shareholder, or the affiliated shareholder'sits affiliates or associates, from entering into a
business combination with an issuing public corporation during the three-year
period immediately following the date on which the affiliated shareholder became
an affiliated shareholder, unless:
o before the date such person became an affiliated shareholder, the
board of directors of the issuing public corporation approves the
business combination or the acquisition of shares that caused the
affiliated shareholder to become an affiliated shareholder; or
o not less than six months after the date such person became an
affiliated shareholder, the business combination is approved by the
affirmative vote of holders of at least two-thirds of the issuing
public corporation's outstanding voting shares not beneficially owned
by the affiliated shareholder, or its affiliates or associates.
An affiliated shareholder is a person that is or was within the preceding
three-year period the beneficial owner of 20% or more of a corporation's
outstanding voting shares. An issuing public corporation includes most publicly
held Texas corporations, including Swift. The term business combination
includes:
o mergers, share exchanges or conversions involving the affiliated
shareholder;
11
o dispositions of assets involving the affiliated shareholder having an
aggregate value of 10% or more of the market value of the assets or of
the outstanding common stock or representing 10% or more of the
earning power or net income of the corporation;
o issuances or transfers of securities by the corporation to the
affiliated shareholder other than on a pro rata basis;
o plans or agreements relating to a liquidation or dissolution of the
corporation involving an affiliated shareholder;
o reclassifications, recapitalizations, distributions or other
transactions that would have the effect of increasing the affiliated
shareholder's percentage ownership of the corporation; and
o the receipt of tax, guarantee, loan or other financial benefits by an
affiliated shareholder other than proportionately as a shareholder of
the corporation.
SELLING SHAREHOLDERS
The selling shareholders20
DESCRIPTION OF DEPOSITARY SHARES
We may offer preferred stock represented by depositary shares and issue
depositary receipts evidencing the depositary shares. Each depositary share will
represent a fraction of a share of preferred stock. Shares of preferred stock of
each class or series represented by depositary shares will be deposited under a
separate deposit agreement among us, a bank or trust company acting as the
"Depository" and the holders of the depositary receipts. Subject to the terms of
the deposit agreement, each owner of a depositary receipt will be entitled, in
proportion to the fraction of a share of preferred stock represented by the
depositary shares evidenced by the depositary receipt, to all the rights and
preferences of the preferred stock represented by such depositary shares. Those
rights include any dividend, voting, conversion, redemption and liquidation
rights. Immediately following the issuance and delivery of the preferred stock
to the Depository, we will cause the Depository to issue the depositary receipts
on our behalf.
If depositary shares are Marabella Enterprises Limited, c/offered, the applicable prospectus supplement will
describe the terms of such depositary shares, the deposit agreement and, if
applicable, the depositary receipts, including the following, where applicable:
o Bligh Oil &
Minerals N.L., Level 10, Suite 1, 100 William Street, Sydney, NSW 2011,
Australia, and any pledgeesthe payment of Marabella under bona fide arm's length loan
transactionsdividends or other cash distributions to the holders of
depositary receipts when such dividends or other cash distributions
are made with third party banks or financial institutions orrespect to the preferred stock;
o the voting by a broker or a
dealer. Based on information available to us asholder of September 30, 2002, Marabella
beneficially owns 300,000depositary shares of the preferred stock
underlying such depositary shares at any meeting called for such
purpose;
o if applicable, the redemption of depositary shares upon a redemption
by us of shares of preferred stock held by the Depository;
o if applicable, the exchange of depositary shares upon an exchange by
us of shares of preferred stock held by the Depository for debt
securities or common stock;
o if applicable, the conversion of the shares of preferred stock
underlying the depositary shares into shares of our common stock,
other shares of our preferred stock or our debt securities;
o the terms upon which the deposit agreement may be offered by the
selling shareholders,amended and
assuming the sale of allterminated;
o a summary of the common stockfees to be paid by us to the Depository;
o the terms upon which a Depository may resign or be offeredremoved by us; and
sold hereunder, Marabella would not, to our knowledge, owno any other terms of the depositary shares, the deposit agreement and
the depositary receipts.
If a holder of depositary receipts surrenders the depositary receipts at
the corporate trust office of the Depository, unless the related depositary
shares have previously been called for redemption, converted or exchanged into
other securities of Swift, common stock afterthe holder will be entitled to receive at this offering. The totaloffice
the number of shares being offered hereunder represents approximately 1.1% of our outstandingpreferred stock and any money or other property
represented by such depositary shares. Holders of depositary receipts will be
entitled to receive whole and, to the extent provided by the applicable
prospectus supplement, fractional shares of the preferred stock on the basis of
the proportion of preferred stock represented by each depositary share as
specified in the applicable prospectus supplement. Holders of shares of
preferred stock received in exchange for depositary shares will no longer be
entitled to receive depositary shares in exchange for shares of preferred stock.
If the holder delivers depositary receipts evidencing a number of depositary
shares that is more than the number of depositary shares representing the number
of shares of preferred stock to be withdrawn, the Depository will issue the
holder a new depositary receipt evidencing such excess number of depositary
shares at the same time.
Prospective purchasers of depositary shares should be aware that special
tax, accounting and other considerations may be applicable to instruments such
as depositary shares.
21
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of preferred or common stock, aseither
independently or together with other securities. Each series of September 30, 2002. Marabella and its affiliates have not
had any relationship with Swift that is materialwarrants will be
issued under a warrant agreement to Swift within the past three
years other than their joint ownership of certain oil and gas interests in New
Zealand. Under an asset purchase agreementbe entered into between Swift and Marabella and its
affiliatesa bank or
trust company. You should refer to the warrant agreement relating to Swift's acquisition from themthe
specific warrants being offered for the complete terms of these interests, until
September 30, 2003,such warrant agreement
and the selling shareholders are permittedwarrants.
Each warrant will entitle the holder to sell no more than
a totalpurchase the number of 60,000 shares of
Swiftpreferred or common stock at the exercise price set forth in, or calculable as
set forth in any calendar week. See "Planapplicable prospectus supplement. The exercise price may be
subject to adjustment upon the occurrence of Distribution."certain events, as set forth in any
applicable prospectus supplement. After the close of business on the expiration
date of the warrant, unexercised warrants will become void. The place or places
where, and the manner in which, warrants may be exercised shall be specified in
any applicable prospectus supplement.
PLAN OF DISTRIBUTION
Swift is registering, underWe may sell the securities offered by this prospectus and applicable
prospectus supplements:
o through underwriters or dealers;
o through agents;
o directly to purchasers; or
o through a combination of any such methods of sale.
Any such underwriter, dealer or agent may be deemed to be an underwriter within
the meaning of the Securities Act of 1933,1933.
The applicable prospectus supplement relating to the 300,000 sharessecurities will set
forth:
o their offering terms, including the name or names of its common stock being offered hereby by Marabella and its pledgees, if any.
Swift will payany underwriters,
dealers or agents;
o the expenses of registrationpurchase price of the shares. Marabella will paysecurities and the proceeds to us from such
sale;
o any brokerageunderwriting discounts, commissions and similar selling expenses attributableother items constituting
compensation to underwriters, dealers or agents;
o any initial public offering price;
o any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers;
o in the case of debt securities, the interest rate, maturity and
redemption provisions; and
o any securities exchanges on which the securities may be listed.
22
If underwriters or dealers are used in the sale, of the shares. Swiftsecurities will receive no part of the proceeds from the sale of the
sharesbe
acquired by the selling shareholders. Marabella has agreed to indemnify Swift
against certain losses, claims, damagesunderwriters or dealers for their own account and liabilities incident to the sale of
the shares, including liabilities under the Securities Act.
Marabella has informed Swift that it may effect sales of sharesbe resold
from time to time in:
o ordinary brokeragein one or more transactions and transactions in which the
broker-dealer solicits purchasers,
o block trades, in which the broker-dealer will attempt to sell shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction,
12
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account,
o an exchange distribution or special offering in accordance with the rules of
the applicable exchange,New York Stock Exchange and the Pacific Stock Exchange:
o privately negotiated transactions,
o short sales,
o sales by broker-dealers of a specified number of shares at a stipulatedfixed price per share,or prices which may be changed;
o a combination of any such methods of sale, and
o any other method permitted pursuant to applicable law, at market prices prevailing at the time of sale,sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
These
salesThe securities may be offered to the public either through underwriting
syndicates represented by one or may not involve brokers or dealers. Marabella may also pledge the
shares to a broker or dealer and upon a default, the broker or dealer may effect
sales of the pledged shares. Marabella has advised Swift that Marabella has not
entered into any agreements, understandings or arrangements with anymore managing underwriters or broker-dealers regardingdirectly by one
or more of such firms. Unless otherwise set forth in an applicable prospectus
supplement, the obligations of underwriters or dealers to purchase the
securities will be subject to certain conditions precedent and the underwriters
or dealers will be obligated to purchase all the securities if any are
purchased. Any public offering price and any discounts or concessions allowed or
reallowed or paid by underwriters or dealers to other dealers may be changed
from time to time.
Securities may be sold directly by us or through agents designated by us
from time to time. Any agent involved in the offer or sale of the shares, nor is there an
underwriter or coordinating broker actingsecurities in
connection with the proposed sale
of shares by Marabella.
Swift originally issued the shares offered hereunder to Marabella under the
terms of an asset purchase agreement attached as an exhibit to the registration
statementrespect of which this prospectus and a prospectus supplement is a part. The asset purchase agreement
governed the purchase by Swift from Marabella and an affiliated entity of their
participating interest in certain New Zealand oil and gas interests. Under that
agreement, until September 30, 2003, Marabelladelivered will
be named, and any pledgeescommissions payable by us to such agent will be set forth, in
the prospectus supplement. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If so indicated in the shares,
together with parties who acquire sharesprospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers from pledgees, may not sell more thancertain specified
institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a totalspecified date in the future. Such
contracts will be subject to any conditions set forth in the prospectus
supplement and the prospectus supplement will set forth the commission payable
for solicitation of 60,000 shares insuch contracts. The underwriters and other persons
soliciting such contracts will have no responsibility for the validity or
performance of any calendar week. Swift has placed a stop transfer
notation to this effect in its stock transfer book with regard to the shares
offered hereunder.
Marabellasuch contracts.
Underwriters, dealers and any other selling shareholders, and any broker, dealer or
other agent that acts on their behalf in connection with the sale of these
shares,agents may be deemedentitled under agreements entered
into with us to be "underwriters" within the meaning of the Securities
Act, in which event compensation receivedindemnified by any such broker, dealer or agent
and profit on any resale of the shares may be deemed to be underwriting
discounts or commissions under the Securities Act. Commissions received by a
broker, dealer or agent may be in excess of customary compensation.
The shares offered hereunder may also be sold by the selling shareholders
in the future in accordance with Rule 144us against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution by
complying
with the requirements of that rule.
Because Marabella and any other selling shareholderSwift to payments which they may be an "underwriter"
within the meaningrequired to make. The terms and conditions
of Section 2(11) of the Securities Act, theysuch indemnification will be subject
todescribed in an applicable prospectus
supplement. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, us in the prospectus delivery requirementsordinary course of
business.
Each class or series of securities will be a new issue of securities with
no established trading market, other than the Securities Act for offers and
sales of the shares, including delivery through the facilities ofcommon stock, which is listed on
the New York Stock Exchange orand the Pacific ExchangeStock Exchange. We may elect to list
any other class or series of securities on any exchange, other than the common
stock, but we are not obligated to do so. Any underwriters to whom securities
are sold by us for public offering and sale may make a market in such
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as providedto the liquidity of the trading market for any securities.
23
Certain persons participating in Rule 153 underany offering of securities may engage in
transactions that stabilize, maintain or otherwise affect the Securities Act. Swift has informed Marabella thatprice of the
anti-manipulative
provisionssecurities offered. In connection with any such offering, the underwriters or
agents, as the case may be, may purchase and sell securities in the open market.
These transactions may include overallotment and stabilizing transactions and
purchases to cover syndicate short positions created in connection with the
offering. Stabilizing transactions consist of Regulation M promulgated undercertain bids or purchases for the
Exchange Act may apply to salespurpose of sharespreventing or retarding a decline in the market by Marabella.
If Marabella notifies Swift that Marabella has entered into any material
arrangement with a broker-dealer forprice of the
securities; and syndicate short positions involve the sale by the underwriters
or agents, as the case may be, of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, Swift will file a supplement to this prospectus, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing:
13
o the name of the participating broker-dealer(s),
o thegreater number of shares involved,
osecurities than they are
required to purchase from us, as the price at which such shares were sold,
ocase may be, in the commission paid or discounts oroffering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the broker-dealer(s), where applicable,
o whethersecurities sold for their
account may be reclaimed by the broker-dealer(s) conducted any investigation to verifysyndicate if such securities are repurchased by
the informationsyndicate in stabilizing or incorporated by reference in this prospectus, and
o other material factscovering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the transaction.securities,
which may be higher than the price that might otherwise prevail in the open
market, and if commenced, may be discontinued at any time. These transactions
may be effected on the New York Stock Exchange, the Pacific Stock Exchange, in
the over-the-counter market or otherwise. These activities will be described in
more detail in the sections entitled "Plan of Distribution" or "Underwriting" in
the applicable prospectus supplement.
LEGAL MATTERSOPINIONS
Jenkens & Gilchrist, A Professional Corporation, Houston, Texas, will issue
an opinion for Swift regarding the legality of the securities offered by this
prospectus.prospectus and applicable prospectus supplement. If the securities are being
distributed in an underwritten offering, certain legal matters will be passed
upon for the underwriters by counsel identified in the applicable prospectus
supplement.
EXPERTS
On June 12,The consolidated financial statements of Swift Energy Company as of
December 31, 2002 our board of directors, acting uponand for the recommendation of
our audit committee, approvedyear then ended, appearing in Swift Energy
Company's Annual Report (Form 10-K) for the appointment ofyear ended December 31, 2002, have
been audited by Ernst & Young LLP, as our
independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of Swift Energy Company at December
31, 2001 and for each of the two years in the period ended December 31, 2001
appearing in Swift Energy Company's Annual Report on Form 10-K for the fiscal year
endingended December 31, 2002 to replacehave been audited by Arthur Andersen LLP, independent
auditors, as our independent auditors.set forth in their report thereon, a copy of which is included
therein and incorporated herein by reference. The audit partner and manager
primarily responsible for our audit of financial statements for the years 1999,
2000 and 2001 whichreports have not been incorporated by reference into this prospectus, as
well as other personnel ofreissued
because Arthur Andersen LLP have left Arthur Andersen. As a
resulthas ceased operations. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of these eventssuch firm as experts in accounting and the revocation of Arthur Andersen's license in Texas,auditing.
Because Arthur Andersen is no longer in a position to consent to the
inclusion or incorporation by reference in any prospectus or registration
statement of its report on such financial statements. Therefore,statements, we wouldare not have been able to obtain,
and have not filed, Arthur Andersen's consent in reliance on Rule 437a437(a) under
the Securities Act of 1933. DueConsequently, your ability to theassert claims against
Arthur Andersen LLP will be limited. In particular, because of this lack of
Arthur Andersen's written consent, you will not be able to the incorporation
by reference of its reports in this prospectus,sue Arthur Andersen may not have any
liabilityLLP under Section 1111(a)(4)
of the Securities Act for any untrue statement of 1933 for false and
misleading statements or omissionsa material fact contained in
this prospectus, including the financial statements audited by Arthur Andersen LLP or any omissions to
state a material fact required to be stated in those financial statements.
Any other claimsTherefore, your right of recovery against Arthur Andersen related to any
such false or misleading statements or omissionsunder that section
will be limited, particularly
inlimited.
24
On June 18, 2002, we filed a Current Report on Form 8-K announcing that our
board of directors, acting upon the event thatrecommendation of our audit committee,
engaged Ernst & Young LLP as our independent public accountants for fiscal 2002,
replacing Arthur Andersen ceasesLLP. The decision to existchange independent public
accountants was not the result of any disagreement with Arthur Andersen LLP on
matters of accounting principles or becomes insolvent.practices, financial statement disclosure or
auditing scope and procedure.
Information referenced or incorporated by reference in this prospectus
regarding our estimated quantities of oil and gas reserves and the discounted
present value of future net cash flows therefrom is based upon estimates of such
reserves and present values audited by H.J. Gruy and Associates, Inc.,
independent petroleum engineers.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by Swift in
connection with the sale of securities being registered hereby. All amounts are
estimates, except the registration fee.
Item Amount
---- ----------------
SEC registration fee......................fee........................................ $ 293-0-
Printing fees............................................... $ 250,000
Accounting fees and expenses................................ $ 140,000
Legal fees and expenses...................expenses..................................... $ 190,000
Blue Sky qualification fees and expenses.................... $ 12,000
Trustees' fees and expenses................................. $ 18,000
Rating agency fees.......................................... $ 65,000
Miscellaneous expenses....................expenses...................................... $ 1,500
----------
Total.....................................25,000
-------------
Total.............................................. $ 13,793
==========700,000
=============
Item 15. Indemnification of Officers and Directors
Swift has the authority under Articles 2.02(A)(16) and 2.02-1 of the Texas
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. Swift's bylaws, as amended, provide for
indemnification of its officers, directors and employees to the fullest extent
permitted by Article 2.02-1 of the Texas Business Corporation Act. With
shareholder approval, Swift amended its articles of incorporation to confirm
that Swift has the power to indemnify certain persons in such circumstances as
are provided in its Bylaws. The amendment allows Swift to enter into additional
insurance and indemnity arrangements at the discretion of Swift's board of
directors. Swift has entered into indemnification agreements with certain of its
officers and directors whichthat indemnify the individual to the fullest extent
permitted by law.
25
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
a corporation's articles of incorporation may provide for the elimination or
limitation of a director's liability. Swift's Articles of Incorporation
eliminate the liability of directors to Swift or its shareholders for monetary
damages for an act or omission in his capacity as a director, with certain
specified exceptions to the fullest extent permitted by Article 7.06 of the
Texas Miscellaneous Corporation Laws Act.
Swift maintains insurance which will cover amounts that it is required to
pay certain of its officers and directors under the indemnity provisions
described above and coverage for its officers and directors against certain
liabilities, including certain liabilities under the federal securities law.
II-1
Item 16. Exhibits
Exhibit No. Document Description
----------- --------------------
4.1 Asset Purchase**1.1 Form of Underwriting Agreement among(Debt Securities)
**1.2 Form of Underwriting Agreement (Common Stock)
**1.3 Form of Underwriting Agreement (Preferred Stock)
**1.4 Form of Underwriting Agreement (Depositary Shares)
**1.5 Form of Underwriting Agreement (Warrants)
*4.1 Form(s) of Indentures between Swift Energy Company and
Trustee to be designated therein covering Debt Securities
to be offered hereunder, including Form of Note or
Debenture attached thereto
**4.2 Form of Certificate of Designation for Preferred Stock, including Specimen Certificate
**4.3 Form of Depositary Agreement between Swift Energy New Zealand Limited, Bligh Oil & Minerals
N.L., Marabella Enterprises LimitedCompany
and Bligh Oil &
Minerals (NL)Limited, dated asDepository to be designated therein covering
Depositary Shares to be offered hereunder, including Form
of August 30, 2002
4.2Depositary Receipt attached hereto
**4.4 Form of Warrant Agreement and Trustee to be designated
therein covering Common Stock Warrants to be offered
hereunder, including Form of Common Stock Warrant
attached thereto
**4.5 Form of Warrant Agreement and Trustee to be designated
therein covering Preferred Stock Warrants to be offered
hereunder, including Form of Preferred Stock Warrant
attached thereto
4.6 Rights Agreement, including exhibits, as amended and
restated as of March 31, 1999, between Swift Energy
Company and American Stock Transfer & Trust Company,company, as
Rights Agent (incorporated by reference to Exhibit 1 to
Swift Energy Company's Registration Statement on
Form 8-A/A filed April 7, 1999)
5*5 Form of Opinion of Jenkens & Gilchrist, A Professional Corporation, as to the validity of
the Securities being registered hereunder
23.1**8 Form(s) of Opinion of Jenkens & Gilchrist, A Professional Corporation, as to Tax Matters
*12 Swift Energy Company Ratio of Earnings to Fixed Charges
*23.1 Consent of H.J. Gruy and Associates, Inc.
23.2*23.2 Consent of Ernst & Young LLP
23.3 Consent of Arthur Andersen LLP (omitted pursuant to Rule 437(a) of the Securities Act of 1933)
23.4 Form of Consent of Jenkens & Gilchrist, A Professional Corporation (included in Exhibit 5)
**23.5 Form of Consent of Jenkens & Gilchrist, A Professional Corporation (included in Exhibit 5)8)
*24 Power of Attorney (included on signature page)
**25 Statement(s) on Form T-1 of Eligibility of Trustee for the Debt Securities
- ----------------------
* Filed herewith
** To be filed by amendment or Form 8-K
26
17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
securities registered hereby, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-
effectivepost-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933 if, in the aggregate, the
changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; Provided,provided, however, that the undertakings
set forth in paragraph (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
27
(b) The undersigned registrant hereby understands that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant'sRegistrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this registration statementthe
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrantRegistrant pursuant to the foregoing provisions, or otherwise, the registrantRegistrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrantRegistrant of expenses incurred or
paid by a director, officer or controlling person of the registrantRegistrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrantRegistrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-3(d) For the purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(e) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of that Act.
28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statementRegistration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on September 30, 2002.January 20, 2004.
SWIFT ENERGY COMPANY
By: /s/ Alton D. Heckaman, Jr.
--------------------------------
Alton D. Heckaman, Jr.
Senior Vice/s/ Terry E. Swift
-----------------------------------------
Terry E. Swift
President and Chief FinancialExecutive Officer
Each person whose signature appears below as a signatory to this
registration statementRegistration Statement constitutes and appoints Terry E. Swift, Alton D.
Heckaman, Jr., and David W. Wesson,Bruce Vincent or any of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this registration statement,Registration Statement, and to file the same, with
all exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statementRegistration Statement has been signed by the following persons in the
capacities and on the dates indicated, in multiple counterparts with the effect
of one original.
Signatures Title Date
---------- ----- ----
/s/ A. Earl Swift
- --------------------------------------------------------------------------------- Chairman of the Board September 30, 2002January 16, 2004
A. Earl Swift
/s/ Terry E. Swift
- --------------------------------------------------------------------------------- President, Chief Executive Officer (Principal September 30, 2002January 20, 2004
Terry E. Swift (Principal Executive Officer) and Director
/s/ Alton D. Heckaman, Jr.
- --------------------------------------------------------------------------------- Senior Vice President September 30, 2002President-Finance, January 19, 2004
Alton D. Heckaman, Jr. Chief Financial Officer
(Principal Financial Officer)
/s/ David W. Wesson
- --------------------------------------------------------------------------------- Controller September 30, 2002January 19, 2004
David W. Wesson (Principal Accounting Officer)
/s/ Virgil N. Swift
- --------------------------------------------------------------------------------- Director September 30, 2002January 19, 2004
Virgil N. Swift
/s/ G. Robert Evans
- --------------------------------------------------------------------------------- Director September 30, 2002January 19, 2004
G. Robert Evans
/s/ Raymond E. Galvin
- -------------------------------------- Director January 16, 2004
Raymond E. Galvin
/s/ Greg Matiuk
- -------------------------------------- Director January 19, 2004
Greg Matiuk
- -------------------------------------- Director January __, 2004
Henry C. Montgomery
- --------------------------------------------------------------------------------- Director September 30, 2002
Henry C. Montgomery
/s/ Clyde W. Smith, Jr.
- ------------------------------------------ Director September 30, 2002January __, 2004
Clyde W. Smith, Jr.
/s/ Harold J. Withrow
- --------------------------------------------------------------------------------- Director September 30, 2002January 18, 2004
Harold J. Withrow
/s/ Raymond E. Galvin
- ------------------------------------------- Director September 30, 2002
Raymond E. Galvin
29